Freddie Mac is looking to collect another $3.4 billion from banks it says sold it shoddy mortgages.

The methodology used to settle previous repurchase claims was flawed, and that thousands of loans soured were not included as a result, according to a report from the Federal Housing Finance Agency’s Office of the Inspector General.

The report comes after a $1.3 billion settlement between Bank of America and Freddie Mac back in January 2011. That settlement was criticized by some as being too small. The IG’s office then stepped in to find out how Freddie was determining the loans it was including for review.

It found that Freddie Mac’s practice excluded from the repurchase claim review process many loans that it had purchased during 2005 through 2007–a time in which loan defaults were soaring, the IG’s report says. In essence, the loans that Freddie was asking BofA to repurchase were only ones that defaulted within two years of origination–those didn’t end up including loans from the 2005 to 2007 period.

Now Freddie Mac is changing its review process to include large numbers of loans that defaulted more than two years after origination. The result: an additional $2.2 to $3.4 billion in recoveries for Freddie Mac.

“Because these recoveries had not been anticipated and accounted for, the added revenue will increase Freddie Mac’s profits and hence the amount paid to the U.S. Department of the Treasury,” the report notes.

Mortgage repurchase claims have plagued the earnings of big banks including Citigroup, JPMorgan, Wells Fargo and particularly Bank of America. BofA saw repurchase claims from Fannie Mae and Freddie Mac shoot up from $5 billion last year to $10.9 billion in the most recent quarter–that’s a 110% increase. Between March 31 and June 30th alone the claims from GSE are up 35% from $8.1 billion in the first quarter.